Manufacturing and EU research investment post 2020

On 26 September 2018 John spoke at the European Forum for Manufacturing dinner debate at the European Parliament. The debate , entitled "From High-Tech R&D To Cutting Edge Infrastructures In The MFF: How Horizon Europe, CEF And Other Instruments Can Drive EU Competitiveness" (snappy, eh), coincided with the consideration of legislation for the Horizon Europe framework programme in the post 2020 seven year EU budget (MFF).

This is John's policy paper republished from the EFM event papers:

John HOWARTH MEP, (S&D, UK), Budgets Committee

The Horizon Framework Programmes and European Manufacturing Competitiveness

In the first three years of the current EU scientific research Framework Programme 8, Horizon 2020, brought together 14,768 for profit businesses, 1,494 educational institutions, 2,147 research organisations and 1,490 public sector bodies in funded collaborations.

These projects represented only 1 in 4 of the proposals assessed as high quality during the first three years of the seven year programme. By this measure funding for the EU Framework programmes, though productive of itself, has been woefully inadequate in ensuring that European research is enabled to deliver its full potential. The 2014-20 MFF set funding just under €75bn - €13bn, 15% less than the Commission had proposed.

However, the challenge is recognised to some extent. Both the European Commission and the European Parliament have highlighted research and innovation as a strategic priority for the Union. Funding for the next Multiannual Financial Framework (MFF - the EU’s seven year budget), from 2021 to 2027, sits around €98bn in the proposals put forward by the European Commission. This represents an increase but does not live up to the bold talk of the Commission President, Mr Junker. It represents a relatively small step forward. The MFF, however is legally speaking, a binding international agreement between the member states and, as such, is the property of the EU Council. It remains to be seen whether the Council shares the notion of priority for Framework 9 once the hard talking over numbers begins. Were the Horizon Europe budget lines to be scaled back in a similar manner, one could be looking at a pot of €83bn - hardly an increase at all and in proportionate terms, around 7.5% of total MFF commitments. Despite the rhetoric from the top of the Commission, this is hardly a decisive shift of the Union’s priorities. The European Parliament resolution of 14 March 2018 called for an FP9 Budget of at least €120bn.

These figures, however, hide the as yet imponderable effect of a British exit from the EU. The UK contribution to HorizonEurope could be anything between zero (were the UK to walk away from either the EU without a deal from FP9 because of conditions deemed unacceptable) and €15bn with participation at current success rates.

The bigger the programme, the better the news for Europe’s manufacturers. Horizon Europe addresses a series of key challenges that can produce real gains for the sector unlikely to be realised by any other means. The European Union adds value by providing:

Economies of scale - the programme can address research that is otherwise too broad, too deep and too expensive for individual organisations to attempt, in doing so harnessing the capacity of a diverse group of organisations ranging from SMEs to major publicly funded centres of research excellence

The means of engagement - those sceptical of the value of the EU and its programmes generally feel uncomfortable when confronting the empirical world of research and innovation but when they do engage they frequently contend that, left to its own devices, the market would fill the void and solutions would evolve without the need for the dead hand of the bureaucrat. This seems to anyone who cares to look to be wishful thinking. The role that the EU plays in making the Horizon programmes happen across national and linguistic boundaries is now simply taken for granted, but its value cannot be underestimated. The definitions and streams provided by the pillars of the Horizon programmes, through challenges and proposal calls, make projects happen. There is simply no substitute for a central organising authority

Within this context Horizon Europe seeks to address through innovation the central business challenges facing manufacturers:

Delivering higher productivity - to maintain Europe’s economic position progressively raising productivity is a central challenge. A good example of Horizon’s contribution is the Satisfactory project. This partnership of ten organisations across five countries co-ordinated in Greece, seeks to create the smart factory, researching working environments, processes and decision making in the modern productive workplace. Smart sensors and data analysis, decision support systems, collaboration and information sharing, augmented reality and gamification methods are all part of the mix delivering environments in which productivity gains are realised

Lowering material and component costs - improving competitiveness in manufacturing with more cost effective materials. With pilot applications in aerospace, medical technology and automotive, the Borealis project develops new means of producing more cost effective components and developing revolutionary smart manufacturing tools. 15 businesses and research organisations contributed to the project co-ordinated in Finland and Switzerland

Supporting growth - innovation to improve the growth potential. For example the ReconCell consortium have developed reconfigurable robot work cells that make practical the robotisation of production for SMEs where costs were otherwise prohibitive. Nine organisations led by the Josef Stefan Institute in Slovenia collaborate in the project

Creating solutions for new and growing markets - the circular economy promises new directions but requires priming through research into products and production processes. Ecosolar seeks to re-engineer the processes in the manufacture of solar panels. The project “envisions an integrated value chain to manufacture and implement solar panels in the most ecologic way, taking into account reuse of materials while manufacturing and repurposing solar panel components at end of life”. Co-ordinated by Norwegian research foundation, Sintef, the project involves eleven organisations

Addressing societal challenges - environmental markets increasingly provide large scale challenges. Horizon prizes offer cash incentives for solutions to societal problems - such as automotive emissions, tactile displays and materials for clean air. Solutions proposed need to be marketable, affordable and sustainable. One of this year’s Horizon prizes seeks to promote the development of materials to improve air quality - an increasingly critical issues for major conurbations and a serious public health challenge. The winner will be announced at the end of October in Vienna at INDTECH18 - a conference on innovative industries for smart growth, promoted by the Austrian Presidency under the Horizon programme

Horizon Europe’s continuation goes beyond its direct continue to innovation. It’s aims include the promotion of excellence in science. Accordingly Horizon funds its share of fundamental science - something which must continue for the benefit of the European Research Area.

The funding of pure/fundamental science research has been called into question by both market forces and some political currents. The argument that if industry is not prepared to fund research then that research can make little or no contribution to the productive economy has always been of dubious merit. However, a time of increasing marketisation of higher education, undergraduate fees and post-graduation employability has focused university business managers on marketable courses and has led in some member states to the reduction of numbers studying ‘pure’ science and to the closure of courses or entirely departments offering theoretical physics, biology or engineering.

The decline of teaching pure, as well as applied, science and the resulting absence research at theoretical frontiers will only damage practical science. It may be stating the obvious but unless the frontiers of knowledge are continually extended, the possibilities of applying new knowledge cannot reveal themselves. The benefit to manufacturing lies further down the road and cannot always be directly connected. Nonetheless, Horizon Europe should be open to funding fundamental science projects and to catalysing the partnerships and collaboration that enables knowledge to be extended for its own sake.

Horizon provides the framework that facilitates collaboration between industry leading businesses and leading research institutions. It enables the scientific progress to develop hand-in-hand with manufacturing, applying the practicality of developing production processes to experimentation and theory. It is producing solutions to real business challenges and both building and broadening the sum of knowledge within the European Research Community. As such the Framework Programmes continue to be the most direct means of enhancing the competitive performance of manufacturing on the European continent.